Perhaps the most remarkable things about proximity technology — and beacons in particular — is how rapidly the industry has grown in such a short time. Just this past January, Unacast, which operates a network of beacon and proximity data, revealed in its Q1 2016 Proxbook report a 52% growth in the number of beacons deployed by its members (all proximity companies). The Q2 2016 report by Proxbook, just released this morning, shows that since then, there’s been a 33% increase in global sensors. Beacons must be doing something right for that kind of explosive growth.
The Orlando Magic would certainly say so — they’re among the sports teams that are making major bank off beacons. According to the new report, proximity technology has enabled sports teams and their venues to reclaim over $1 billion in lost ticket sales since 2015.
The report asserts that the Orlando Magic saw over $1 million in increased ticket sales, in addition to a 30% app adoption (a whopping figure when you consider that the industry standard is only at 5%). Moreover, Unacast noted a 233% increase in Fast Break Pass sales from last season, plus a spike of 80% app usage by season ticket holders. The Cleveland Cavaliers, the Golden State Warriors, and the Milwaukee Bucks are also seeing big payoff from proximity solutions, the report says.
How on earth is proximity technology scoring that many homeruns for a sports teams and their supporting venues? As Thomas Walle, co-founder and CEO of Unacast explained to Street Fight, a few factors come into play.
“Sports is one of the verticals with the highest penetration of beacons,” said Walle. “A huge number of teams have them [deployed]: 93% of all MLB stadiums, 53% of all NBA stadiums; and 47% of NHL stadiums. One of the main reasons teams [embrace] beacons is because they’re struggling with ticket sales. Fans are aren’t going to the stadiums like they used to.”
In an age where social media rules and consumers are obsessed with the “experiential,” it’s hard to believe that sports arenas are struggling. But when you consider how advanced TV and streaming technology have become — and how expensive a day at the game is when you count in factors like parking, food, and beer — the idea of catching multiple games at a time on your HD screen sounds pretty enticing. The irony is that the TV experience of sports is often better than the real experience — or so it would appear. That’s where beacons come into play.
“Sports have become so good on TV, and teams are trying to create a better, more compelling user experience to get fans off the couch and back in the stadium seats” said Walle. Beacons are an increasingly useful tool in enhancing one’s experience when going to a game, and can actually give you more bang for your buck.
“One of the biggest ways beacons are increasing customer experience is by [offering] seat upgrades when people enter the stadium,” said Walle, noting that the Seahawks and the Golden State Warriors have been particularly aggressive — and successful — in this approach. “They send a push notification [in-app] that a seat upgrade is available.”
Another classic push notification scenario is this: Let’s say Pizza Hut has a shop in the food court, and they want to attract consumers. They can send an in-app push notification alerting the customer that they’re there, and tack on an offer of a free Coke or some other such incentive.
But it’s not seat upgrades or free Cokes that are raking in the dough, thanks to beacons: it’s the consumer data.
“A lot of data is being collected when fans are using [their sports app] at a stadium,” said Walle. “Most of these teams are thinking: how can I leverage this data and monetize it toward sponsors, or incorporate it into my existing CRM system?”
So, for example, if Nike is sponsoring a sporting event and via beacons, interprets that 500 fans are in the arena, they can use that data for retargeting and other marketing purposes. That’s a goldmine for virtually anyone on board, and if all it takes is a beacon to get it, then no wonder beacons are so huge.
But unfortunately, it takes more than just a beacon to get that data. It takes an app and an opt-in, and the enabling of Bluetooth, and other small but crucially significant steps. Walle says that the biggest challenge for beacons right now, is that so few people, relatively speaking, actually download and activate these necessary apps.
“This limits the reach because not all fans are walking around with these apps,” Walle said, adding that this may not be the case for long — not with Google’s investment in the beacon space.
“45% of all proximity companies out there support Google Eddystone,” said Walle. “They’re eating the market share, and while Apple has been very quiet lately [in the beacon space], we hear rumors that they are ramping up their fall beacon initiative [in step with] the launch of the iPhone 7 and iOS 9.”
What we may reasonably imagine is a world where consumer apps aren’t needed, but just mobile browsers, to connect beacon technology to people and the data they carry. Walle says: “It’ll make everyone a helluva lot of money.”
Nicole Spector is a Street Fight contributor.